TIDMSYNT
RNS Number : 0990Q
Synthomer PLC
16 June 2020
16th June 2020
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, CANADA, JAPAN
OR AUSTRALIA OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE
UNLAWFUL TO DO SO
Synthomer plc
Announcement of intention to offer EUR520 million of unsecured
senior notes and Q2 trading update
Synthomer plc ('Synthomer' or 'the Group') today announces that
it intends, subject to market conditions, to offer EUR520 million
in aggregate principal amount of unsecured senior notes due 2025
(the 'Notes'). The Notes will be unconditionally guaranteed by
certain of its subsidiaries.
OMNOVA acquisition
Consistent with previously announced plans, the Group intends to
use the proceeds from the offering to (a) refinance Synthomer's
existing EUR520 million bridge facility which was introduced in
2019 as part of the financing arrangements to fund, together with
certain other funding, the acquisition of OMNOVA Solutions Inc.
('OMNOVA') and (b) pay certain costs, expenses and fees related to
the offering of the Notes. The acquisition has established
Synthomer as a global speciality chemicals company with significant
scale and a strong platform from which to invest in future growth.
Integration is progressing in line with expectations and the Group
is on track to deliver $29.6m of synergies, with a 50% run rate at
the end of 12 months.
Following the issuance of the Notes, Synthomer expects to have a
long term and sustainable financing structure. The Group has a
strong balance sheet with significant leverage covenant headroom
(4.25x and 4x EBITDA for 2020 and 2021 respectively) and
significant liquidity underpinned by the 2024 committed unsecured 5
year EUR460 million revolving credit facility and $260 million term
loan bank facilities.
The new financing structure will give Synthomer flexibility to
be able to respond to the current challenging macroeconomic
environment and in due course be able to take advantage of future
growth opportunities.
April and May Trading
In addition, Synthomer today provides its Q1 interim financial
statements and an update on current trading which have been
prepared in connection with the Group's Notes offering:
As announced previously, Synthomer (excluding OMNOVA),
experienced a solid start to the year with EBITDA approximately 5%
ahead of the comparative Q1 period, and in line with expectations
set out at the time of the Group's full year results
announcement.
On April 1(st) , 2020, Synthomer completed the acquisition of
OMNOVA and accordingly our Q2 trading update relates to the
enlarged group comprising the Synthomer and OMNOVA legacy
businesses. April and May volumes were impacted by COVID-19 and
whilst demand for Nitrile latex, non-wovens and adhesives remained
strong, sales into industrial markets including automotive,
coatings, graphic paper, carpet and the oil and gas sector were
lower. Volumes were lower than a strong comparative period by
approximately 20% although volumes did strengthen towards the end
of May.
Performance Elastomers
During April and May our Nitrile latex business continued to
benefit from the additional 90 kilotonnes of capacity introduced in
Q4 2018 at our Pasir Gudang site. In addition, we saw further
strengthening of demand due to COVID-19 leading to higher Nitrile
volumes. Nitrile unit gross margins improved during April and May
on the back of lower raw material cost.
Styrene Butadiene Rubber ('SBR') market conditions were impacted
due to weaker demand with volumes and unit gross margins below
prior year in the paper, carpet and foam end markets. The strategic
review of our European SBR network is ongoing and a further update
is expected to be provided at the interim results in August.
Functional Solutions
April and May volumes were lower in all industrial segments
compared to a strong comparative period, but this was partly
compensated for by stronger unit gross margins as a result of
improved mix and softer raw material markets. Progress has been
supported by the acquisition of OMNOVA and by the expansion of our
dispersion facilities in Worms, Germany and Roebuck, USA which
introduced low cost capacity to drive organic growth in
differentiated applications.
Industrial Specialities
April and May volumes were lower in all industrial segments
compared to a strong comparative period. Unit gross margins were in
line with 2019.
Acrylate Monomers
Going forward Synthomer's acrylate monomer business, which
supplies both the Group's internal demand and external customers,
will be reported separately. In April and May, sales volumes and
margins were lower compared to the comparative 2019 period.
As announced in the Group's update on April 29(th) , Synthomer
has taken a number of prudent and proactive actions to preserve the
strength of its balance sheet and reduce capital expenditure for
the current year. Over the medium term the Board remains confident
that Synthomer is well positioned due to the Group's strong
geographic and end market diversity combined with self-help
initiatives and the future benefits to come from the successful
acquisition and integration of OMNOVA.
For additional information regarding our business, please see
our Disclosure Statement found on our website at
https://www.synthomer.com/investor-relations/financials/results-centre.
Cautionary Statement
The Notes will be offered only to qualified institutional buyers
pursuant to Rule 144A and outside the United States pursuant to
Regulation S under the U.S. Securities Act of 1933, as amended (the
'Securities Act'), subject to prevailing market and other
conditions. There is no assurance that the offering will be
completed or, if completed, as to the terms on which it is
completed. The Notes to be offered have not been registered under
the Securities Act or the securities laws of any other jurisdiction
and may not be offered or sold in the United States absent
registration or unless pursuant to an applicable exemption from the
registration requirements of the Securities Act and any other
applicable securities laws. This press release does not constitute
an offer to sell or the solicitation of an offer to buy the Notes,
nor shall it constitute an offer, solicitation or sale in any
jurisdiction in which such offer, solicitation or sale would be
unlawful.
The Notes are not intended to be offered, sold or otherwise made
available to and should not be offered, sold or otherwise made
available to any retail investor in the European Economic Area
('EEA') or the United Kingdom. For these purposes, a retail
investor means a person who is one (or more) of: (i) a retail
client as defined in point (11) of Article 4(1) of Directive
2014/65/EU (as amended, 'MiFID II'); (ii) a person that is not a
qualified investor as defined in Article 2(e) of the Prospectus
Regulation; or (iii) a customer within the meaning of Directive
(EU) 2016/97 (as amended, the 'Insurance Distribution Directive'),
where that customer would not qualify as a professional client as
defined in point (10) of Article 4(1) of MiFID II.
This announcement does not constitute and shall not, in any
circumstances, constitute a public offering nor an invitation to
the public in connection with any offer within the meaning of
Regulation (EU) 2017/1129 (as amended or superseded, the
'Prospectus Regulation'). The offer and sale of the Notes will be
made pursuant to an exemption under the Prospectus Regulation from
the requirement to produce a prospectus for offers of
securities.
In the United Kingdom, this announcement is directed only at (i)
persons having professional experience in matters relating to
investments falling within Article 19(5) of the Financial Services
and Markets Act 2000 (Financial Promotion) Order 2005 (the
'Order'), or (ii) high net worth entities falling within Article
49(2)(a) to (d) of the Order, or (iii) persons to whom it would
otherwise be lawful to distribute them, all such persons together
being referred to as 'Relevant Persons.' The Notes are only
available to, and any invitation, offer or agreement to subscribe,
purchase or otherwise acquire such Notes will be engaged in only
with, Relevant Persons.
MiFID II professionals/ECPs-only/ No PRIIPs KID - Manufacturer
target market (MIFID II product governance) is eligible
counterparties and professional clients only (all distribution
channels). No PRIIPs key information document (KID) has been
prepared as not available to retail investors in EEA or the United
Kingdom.
Neither the content of Synthomer's website nor any website
accessible by hyperlinks on Synthomer's website is incorporated in,
or forms part of, this announcement. The distribution of this
announcement into certain jurisdictions may be restricted by law.
Persons into whose possession this announcement comes should inform
themselves about and observe any such restrictions. Any failure to
comply with these restrictions may constitute a violation of the
securities laws of any such jurisdiction.
This announcement contains inside information within the meaning
of Regulation (EU) No 596/2014 of 16 April 2014 on market
abuse.
Forward-Looking Statements
This press release may include forward-looking statements. These
forward-looking statements can be identified by the use of
forward-looking terminology, including the terms 'believes',
'estimates', 'anticipates', 'expects', 'intends', 'may', 'will' or
'should' or, in each case, their negative, or other variations or
comparable terminology. These forward-looking statements include
all matters that are not historical facts and include statements
regarding Synthomer's or its affiliates' intentions, beliefs or
current expectations concerning, among other things, Synthomer's or
its affiliates' results of operations, financial condition,
liquidity, prospects, growth, strategies and the industries in
which they operate. By their nature, forward-looking statements
involve risks and uncertainties because they relate to events and
depend on circumstances that may or may not occur in the future.
Readers are cautioned that forward-looking statements are not
guarantees of future performance and that Synthomer's or its
affiliates' actual results of operations, financial condition and
liquidity, and the development of the industries in which they
operate may differ materially from those made in or suggested by
the forward-looking statements contained in this press release. In
addition, even if Synthomer's or its affiliates' results of
operations, financial condition and liquidity, and the development
of the industries in which they operate are consistent with the
forward-looking statements contained in this press release, those
results or developments may not be indicative of results or
developments in subsequent periods.
The forward-looking statements and information contained in this
announcement are made as of the date hereof and Synthomer
undertakes no obligation to update publicly or revise any
forward-looking statements or information, whether as a result of
new information, future events or otherwise, unless so required by
applicable securities laws.
-S-
Enquiries:
Synthomer plc Tel: + 44 7764 859147
Calum MacLean, Chief Executive Officer
Stephen Bennett, Chief Financial Officer
Tim Hughes, President, Corporate Development
Teneo Tel: + 44 7703 330 269
Charles Armitstead / Matt Denham
Consolidated income statement
for the three months ended 31 March 2020
Three months ended Three months ended
31 March 2020 31 March 2019
(unaudited) (unaudited)
----------------------------------- ---------------------------
Underlying Special Underlying Special
performance Items IFRS performance Items IFRS
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------- ------- ----- ------------------ ------------ ------- --------
Revenue 338.4 338.4 375.1 375.1
------------------------------------- ------- ----- ------------------ ------------ ------- --------
Company and subsidiaries before
Special Items 31.7 - 31.7 30.5 - 30.5
Acquisition costs and related
gains - 6.0 6.0 - - -
Amortisation of acquired
intangibles - (2.1) (2.1) - (2.4) (2.4)
Restructuring and site closure
costs - - - - (0.5) (0.5)
------------------------------------- ------- ----- ------------------ ------------ ------- --------
Company and subsidiaries 31.7 3.9 35.6 30.5 (2.9) 27.6
Share of joint ventures 0.6 - 0.6 0.3 - 0.3
------------------------------------- ------- ----- ------------------ ------------ ------- --------
Operating profit/(loss) 32.3 3.9 36.2 30.8 (2.9) 27.9
------------------------------------- ------- ----- ------------------ ------------ ------- --------
Interest payable (1.6) - (1.6) (1.6) - (1.6)
Interest receivable 0.2 - 0.2 0.2 - 0.2
Fair value loss on unhedged interest
derivatives - (2.2) (2.2) - (1.9) (1.9)
------------------------------------- ------- ----- ------------------ ------------ ------- --------
(1.4) (2.2) (3.6) (1.4) (1.9) (3.3)
Net interest expense on defined
benefit obligation (0.5) - (0.5) (0.7) - (0.7)
Interest element of lease payments (0.3) - (0.3) (0.3) - (0.3)
------------------------------------- ------- ----- ------------------ ------------ ------- --------
Finance costs (2.2) (2.2) (4.4) (2.4) (1.9) (4.3)
------------------------------------- ------- ----- ------------------ ------------ ------- --------
Profit/(loss) before taxation 30.1 1.7 31.8 28.4 (4.8) 23.6
Taxation (5.4) 0.3 (5.1) (4.0) 0.4 (3.6)
------------------------------------- ------- ----- ------------------ ------------ ------- --------
Profit/(loss) for the period 24.7 2.0 26.7 24.4 (4.4) 20.0
------------------------------------- ------- ----- ------------------ ------------ ------- --------
Profit/(loss) attributable to
non-controlling interests - - - - 0.1 0.1
Profit/(loss) attributable to
equity holders of the parent 24.7 2.0 26.7 24.4 (4.5) 19.9
------------------------------------- ------- ----- ------------------ ------------ ------- --------
24.7 2.0 26.7 24.4 (4.4) 20.0
------------------------------------- ------- ----- ------------------ ------------ ------- --------
Earnings/(loss) per share
Basic 5.8p 0.5p 6.3p 6.7p (1.2)p 5.5p
Diluted 5.8p 0.5p 6.3p 6.6p (1.2)p 5.4p
------------------------------------- ------- ----- ------------------ ------------ ------- --------
Consolidated income statement
for the three months ended 31 March 2020 (continued)
Year ended 31 December
2019
(audited)
------------------------------
Underlying Special
performance Items IFRS
GBPm GBPm GBPm
---------------------------------------- --- ------------ ------- -------
Revenue 1,459.1 - 1,459.1
--------------------------------------------- ------------ ------- -------
Company and subsidiaries before
Special Items 124.9 - 124.9
Acquisition costs - (9.2) (9.2)
Amortisation of acquired intangibles - (8.7) (8.7)
Restructuring and site closure - (0.8) (0.8)
Foreign Exchange gain on rights
issue - 3.5 3.5
Company and subsidiaries 124.9 (15.2) 109.7
Share of joint ventures 0.9 - 0.9
--------------------------------------------- ------------ ------- -------
Operating profit/(loss) 125.8 (15.2) 110.6
--------------------------------------------- ------------ ------- -------
Interest payable (6.7) - (6.7)
Interest receivable 0.9 - 0.9
Fair value loss on unhedged
interest derivatives - (0.5) (0.5)
--------------------------------------------- ------------ ------- -------
(5.8) (0.5) (6.3)
Net interest expense on defined
benefit obligation (2.7) - (2.7)
Interest element of lease
payments (1.1) - (1.1)
--------------------------------------------- ------------ ------- -------
Finance costs (9.6) (0.5) (10.1)
--------------------------------------------- ------------ ------- -------
Profit/(loss) before taxation 116.2 (15.7) 100.5
Taxation (16.3) 1.4 (14.9)
--------------------------------------------- ------------ ------- -------
Profit/(loss) for the year 99.9 (14.3) 85.6
--------------------------------------------- ------------ ------- -------
Profit attributable to non-controlling
interests 0.4 0.6 1.0
Profit/(loss) attributable
to equity holders of the parent 99.5 (14.9) 84.6
--------------------------------------------- ------------ ------- -------
99.9 (14.3) 85.6
-------------------------------------------- ------------ ------- -------
Earnings/(loss) per share
Basic 25.3p (3.8)p 21.5p
Diluted 25.2p (3.8)p 21.4p
--------------------------------------------- ------------ ------- -------
Consolidated statement of comprehensive income
for the three months ended 31 March 2020
Three months ended Three months ended
31 March 2020 31 March 2019
(unaudited) (unaudited)
-------------------------------- ---------------------------------
Equity Equity
holders holders
of the Non-controlling of the Non-controlling
parent interests Total parent interests Total
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------- -------- --------------- ----- -------- --------------- ------
Profit for the period 26.7 - 26.7 19.9 0.1 20.0
------------------------------------- -------- --------------- ----- -------- --------------- ------
Actuarial gains/(losses) 12.6 - 12.6 (13.9) - (13.9)
Tax relating to components of
other comprehensive income (4.0) - (4.0) 4.4 - 4.4
------------------------------------- -------- --------------- ----- -------- --------------- ------
Total items that will not be
reclassified to profit or loss 8.6 - 8.6 (9.5) - (9.5)
------------------------------------- -------- --------------- ----- -------- --------------- ------
Exchange differences on translation
of foreign operations 12.8 0.4 13.2 (10.0) (0.2) (10.2)
Fair value loss on hedged interest
derivatives (0.7) - (0.7) (5.3) - (5.3)
Gains on net investment hedges
taken to equity - - - 0.3 - 0.3
Total items that may be reclassified
subsequently to profit or loss 12.1 0.4 12.5 (15.0) (0.2) (15.2)
------------------------------------- -------- --------------- ----- -------- --------------- ------
Other comprehensive income/(expense)
for the period 20.7 0.4 21.1 (24.5) (0.2) (24.7)
Total comprehensive income/(expense)
for the period 47.4 0.4 47.8 (4.6) (0.1) (4.7)
------------------------------------- -------- --------------- ----- -------- --------------- ------
Year ended 31 December
2019 (audited)
---------------------------------
Equity
holders
of the Non-controlling
parent interests Total
GBPm GBPm GBPm
------------------------------------------ -------- --------------- ------
Profit for the year 84.6 1.0 85.6
------------------------------------------- -------- --------------- ------
Actuarial losses (27.2) - (27.2)
Tax relating to components of other
comprehensive income 4.7 - 4.7
------------------------------------------- -------- --------------- ------
Total items that will not be reclassified
to profit or loss (22.5) - (22.5)
------------------------------------------- -------- --------------- ------
Exchange differences on translation
of foreign operations (15.3) (0.4) (15.7)
Fair value loss on hedged interest
derivatives (8.7) - (8.7)
Losses on net investment hedges
taken to equity (1.9) - (1.9)
Total items that may be reclassified
subsequently to profit or loss (25.9) (0.4) (26.3)
-------------------------------------------
Other comprehensive expense for
the year (48.4) (0.4) (48.8)
Total comprehensive income for the
year 36.2 0.6 36.8
------------------------------------------- -------- --------------- ------
Consolidated statement of changes in equity
for the three months ended 31 March 2020
Capital Hedging
Share Share redemption and translation Retained Non-controlling Total
capital premium reserve reserve earnings Total interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------------------- -------- -------- ----------- ---------------- --------- ----- --------------- -------
At 1 January 2020 42.5 421.1 0.9 (19.5) 204.4 649.4 21.1 670.5
----------------------- -------- -------- ----------- ---------------- --------- ----- --------------- -------
Profit for the period - - - - 26.7 26.7 - 26.7
Other comprehensive
income
for the period - - - 12.1 8.6 20.7 0.4 21.1
----------------------- -------- -------- ----------- ---------------- --------- ----- --------------- -------
Total comprehensive
income
for the period - - - 12.1 35.3 47.4 0.4 47.8
Share-based payments - - - - 0.4 0.4 - 0.4
Dividends - - - - - - - -
----------------------- -------- -------- ----------- ---------------- --------- ----- --------------- -------
At 31 March 2020
(Unaudited) 42.5 421.1 0.9 (7.4) 240.1 697.2 21.5 718.7
----------------------- -------- -------- ----------- ---------------- --------- ----- --------------- -------
Capital Hedging
Share Share redemption and translation Retained Non-controlling Total
capital premium reserve reserve earnings Total interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------- -------- -------- ----------- ---------------- --------- ------ --------------- -------
At 1 January 2019 34.0 230.5 0.9 6.4 192.1 463.9 21.1 485.0
---------------------- -------- -------- ----------- ---------------- --------- ------ --------------- -------
Profit for the period - - - - 19.9 19.9 0.1 20.0
Other comprehensive
expense
for the period - - - (15.0) (9.5) (24.5) (0.2) (24.7)
---------------------- -------- -------- ----------- ---------------- --------- ------ --------------- -------
Total comprehensive
(expense)/income
for the period - - - (15.0) 10.4 (4.6) (0.1) (4.7)
Share-based payments - - - - 0.4 0.4 - 0.4
Dividends - - - - - - - -
---------------------- -------- -------- ----------- ---------------- --------- ------ --------------- -------
At 31 March 2019
(Unaudited) 34.0 230.5 0.9 (8.6) 202.9 459.7 21.0 480.7
---------------------- -------- -------- ----------- ---------------- --------- ------ --------------- -------
Capital Hedging
Share Share redemption and translation Retained Non-controlling Total
capital premium reserve reserve earnings Total interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------- -------- -------- ----------- ---------------- --------- ------ --------------- -------
At 1 January 2019 34.0 230.5 0.9 6.4 192.1 463.9 21.1 485.0
---------------------- -------- -------- ----------- ---------------- --------- ------ --------------- -------
Profit for the period - - - - 84.6 84.6 1.0 85.6
Other comprehensive
expense
for the year - - - (25.9) (22.5) (48.4) (0.4) (48.8)
---------------------- -------- -------- ----------- ---------------- --------- ------ --------------- -------
Total comprehensive
(expense)/income
for the year - - - (25.9) 62.1 36.2 0.6 36.8
Issue of shares 8.5 190.6 - - - 199.1 - 199.1
Share-based payments - - - - (1.9) (1.9) - (1.9)
Dividends - - - - (47.9) (47.9) (0.6) (48.5)
---------------------- -------- -------- ----------- ---------------- --------- ------ --------------- -------
At 31 December 2019
(Audited) 42.5 421.1 0.9 (19.5) 204.4 649.4 21.1 670.5
---------------------- -------- -------- ----------- ---------------- --------- ------ --------------- -------
Consolidated balance sheet
as at 31 March 2020
31 March 31 March 31 December
2020 2019 2019
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
-------------------------------------- ----------- ----------- -----------
Non-current assets
Goodwill 335.3 328.1 324.4
Acquired intangible assets 57.6 63.9 56.8
Other intangible assets 27.1 5.9 22.0
Property, plant and equipment 408.6 405.7 404.9
Deferred tax assets 19.1 28.0 22.8
Investment in joint ventures 8.3 8.2 7.5
-------------------------------------- ----------- ----------- -----------
Total non-current assets 856.0 839.8 838.4
-------------------------------------- ----------- ----------- -----------
Current assets
Inventories 129.0 134.6 121.9
Trade and other receivables 219.3 257.6 190.6
Cash and cash equivalents 475.1 74.7 103.6
Derivative financial instruments 4.3 0.5 4.9
-------------------------------------- ----------- ----------- -----------
Total current assets 827.7 467.4 421.0
-------------------------------------- ----------- ----------- -----------
Total assets 1,683.7 1,307.2 1,259.4
-------------------------------------- ----------- ----------- -----------
Current liabilities
Borrowings (399.0) (85.4) -
Trade and other payables (199.4) (229.8) (232.9)
Lease liabilities (7.5) (8.1) (7.5)
Current tax liabilities (40.5) (39.8) (38.7)
Provisions for other liabilities and
charges (4.6) (8.6) (4.9)
Derivatives financial instruments (17.2) (12.4) (14.3)
-------------------------------------- ----------- ----------- -----------
Total current liabilities (668.2) (384.1) (298.3)
-------------------------------------- ----------- ----------- -----------
Non-current liabilities
Borrowings (103.2) (230.5) (82.9)
Trade and other payables (0.5) (0.7) (0.5)
Lease liabilities (32.7) (35.9) (34.4)
Deferred tax liabilities (31.0) (32.9) (30.8)
Retirement benefit obligations (127.5) (139.8) (140.0)
Provisions for other liabilities and
charges (1.9) (2.6) (2.0)
-------------------------------------- ----------- ----------- -----------
Total non-current liabilities (296.8) (442.4) (290.6)
-------------------------------------- ----------- ----------- -----------
Total liabilities (965.0) (826.5) (588.9)
-------------------------------------- ----------- ----------- -----------
Net assets 718.7 480.7 670.5
-------------------------------------- ----------- ----------- -----------
Equity
Share capital 42.5 34.0 42.5
Share premium 421.1 230.5 421.1
Capital redemption reserve 0.9 0.9 0.9
Hedging and translation reserve (7.4) (8.6) (19.5)
Retained earnings 240.1 202.9 204.4
-------------------------------------- ----------- ----------- -----------
Equity attributable to equity holders
of the parent 697.2 459.7 649.4
Non-controlling interests 21.5 21.0 21.1
-------------------------------------- ----------- ----------- -----------
Total equity 718.7 480.7 670.5
-------------------------------------- ----------- ----------- -----------
Consolidated cash flow statement
for the three months ended 31 March 2020
Three months Three months Year ended
ended ended
31 March 2020 31 March 31 December
2019 2019
(unaudited) (unaudited) (audited)
---------------- -------------- -----------------
GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------------------------- ------- ------- ------ ------ ------ -------
Operating
Cash generated from operations (18.2) (16.9) 170.2
Interest received 0.2 0.3 0.9
Interest paid (1.4) (2.1) (7.0)
Interest element of lease payments (0.3) (0.3) (1.1)
----------------------------------------------- ------- ------- ------ ------ ------ -------
Net interest paid (1.5) (2.1) (7.2)
UK corporation tax paid - - -
Overseas corporate tax paid (4.6) (2.6) (11.1)
----------------------------------------------- ------- ------- ------ ------ ------ -------
Total tax paid (4.6) (2.6) (11.1)
----------------------------------------------- ------- ------- ------ ------ ------ -------
Net cash (outflow)/inflow from operating
activities (24.3) (21.6) 151.9
----------------------------------------------- ------- ------- ------ ------ ------ -------
Investing
Dividends received from joint ventures 0.2 0.5 1.6
Purchase of property, plant and equipment
and intangible assets (13.9) (14.4) (69.1)
Sale of property, plant and equipment - - 0.3
----------------------------------------------- ------- ------- ------ ------ ------ -------
Net capital expenditure (13.9) (14.4) (68.8)
Net cash outflow from investing activities (13.7) (13.9) (67.2)
----------------------------------------------- ------- ------- ------ ------ ------ -------
Financing
Dividends paid - - (47.9)
Dividends paid to non-controlling
interests - - (0.6)
Proceeds on issue of shares - - 199.1
Settlement of equity-settled share-based
payments - - (2.5)
Repayment of principal portion of
lease liabilities (1.7) (1.7) (6.8)
Repayment of borrowings - - (216.3)
Proceeds of borrowings 391.6 - 15.0
----------------------------------------------- ------- ------- ------ ------ ------ -------
Net cash inflow/(outflow) from financing
activities 389.9 (1.7) (60.0)
----------------------------------------------- ------- ------- ------ ------ ------ -------
Increase/(decrease) in cash and bank
overdrafts during the period 351.9 (37.2) 24.7
----------------------------------------------- ------- ------- ------ ------ ------ -------
Comprising increase/(decrease) to:
Cash and cash equivalents 369.5 (20.9) 4.1
Bank overdrafts (17.6) (16.3) 20.6
----------------------------------------------- ------- ------- ------ ------ ------ -------
Increase/(decrease) in cash and bank
overdrafts during the period 351.9 (37.2) 24.7
----------------------------------------------- ------- ------- ------ ------ ------ -------
Cash, cash equivalents and bank overdrafts
at 1 January 103.6 76.2 76.2
Foreign exchange and other movements (5.6) (2.4) 2.7
----------------------------------------------- ------- ------- ------ ------ ------ -------
Cash, cash equivalents and bank overdrafts
at period end 449.9 36.6 103.6
----------------------------------------------- ------- ------- ------ ------ ------ -------
Notes to the interim financial statements
1. Basis of preparation
Synthomer plc is a public limited company incorporated and
domiciled in the United Kingdom under the Companies Act. The
Company is listed on the London Stock Exchange and the address of
the registered office is Temple Fields, Harlow, Essex, CM20
2BH.
These interim financial statements have been prepared in
accordance with applicable law, the Disclosure and Transparency
Rules of the Financial Conduct Authority and with IAS 34 Interim
Financial Reporting, as adopted by the European Union.
These interim financial statements do not comprise statutory
accounts within the meaning of section 434 of the Companies Act
2006. Statutory accounts for the year ended 31 December 2019 were
approved by the Board of Directors on 5 March 2020 and delivered to
the Registrar of Companies. The report of the auditors on those
accounts was unqualified, did not contain an emphasis of matter
paragraph and did not contain any statement under section 498 of
the Companies Act 2006.
The interim financial statements do not include all the notes of
the type normally included in annual financial statements.
Accordingly, this report is to be read in conjunction with the
Annual Report for the year ended 31 December 2019 and any public
announcements made by the Company during the interim reporting
period.
After making enquiries and taking account of reasonably possible
changes in trading performance, the Directors are satisfied that,
at the time of approving the interim financial statements for the
Group, it is appropriate to adopt the going concern basis.
2. Accounting policies
The annual financial statements of Synthomer plc are prepared in
accordance with IFRSs as adopted by the European Union and
applicable law. The same accounting policies and methods of
computations are followed in these financial statements as in the
most recent audited annual financial statements. There are no
updates to IFRSs effective from 2020 that impact the Group.
3. Special Items
IFRS and Underlying performance
The IFRS profit measures show the performance of the Group as a
whole and as such include all sources of income and expense,
including both one-off items and those that do not relate to the
Group's ongoing businesses. To provide additional clarity on the
ongoing trading performance of the Group's businesses, management
uses "Underlying" performance as an alternative performance measure
to plan for, control and assess the performance of the segments.
Underlying performance differs from the IFRS measures as it
excludes Special Items.
Special Items
Special Items are disclosed separately in order to provide a
clearer indication of the Group's underlying performance.
Special Items are either irregular, and therefore including them
in the assessment of a segment's performance would lead to a
distortion of trends, or are technical adjustments which ensure the
Group's financial statements are in compliance with IFRS but do not
reflect the operating performance in the year, or both. An example
of the latter is the amortisation of acquired intangibles, which
principally relates to acquired customer relationships. The Group
incurs costs, which are recognised as an expense in the income
statement, in maintaining these customer relationships. The Group
considers that the exclusion of the amortisation charge on acquired
intangibles from Underlying performance avoids the potential double
counting of such costs and therefore excludes it as a Special Item
from Underlying performance.
The definition of Special Items is shown in note 17 and has been
consistently applied.
Special Items comprise:
Three months Three months Year ended
ended 31 ended 31 31 December
March 2020 March 2019 2019
Unaudited Unaudited Audited
GBPm GBPm GBPm
----------------------------------------- ------------ ------------ ------------
Special Items
Acquisition costs and related gains 6.0 - (9.2)
Amortisation of acquired intangibles (2.1) (2.4) (8.7)
Restructuring and site closure costs - (0.5) (0.8)
Foreign exchange gain on rights issue - - 3.5
Operating profit/(loss) 3.9 (2.9) (15.2)
----------------------------------------- ------------ ------------ ------------
Fair value loss on unhedged interest
derivatives (2.2) (1.9) (0.5)
----------------------------------------- ------------ ------------ ------------
Finance costs (2.2) (1.9) (0.5)
----------------------------------------- ------------ ------------ ------------
Profit/(loss) before taxation 1.7 (4.8) (15.7)
----------------------------------------- ------------ ------------ ------------
The following items of income and expense were reported as
Special Items and accordingly were excluded from Underlying
performance:
-- Acquisition costs and related gains in the three months to
March 2020 relate to the acquisition of OMNOVA Solutions Inc and
comprise GBP2.7 million of costs offset by a gain of GBP8.7 million
on a foreign exchange derivative entered into in July 2019 to hedge
the acquisition price. Acquisition costs in 2019 also relate to the
acquisition of OMNOVA partly offset by a gain of GBP4.0m on the
foreign exchange derivative.
-- Amortisation of intangibles decreased during the period as
the final tranche of customer-related intangibles from the 2011
PolymerLatex acquisition reached the end of their amortisation
period in Q1 2019.
-- Restructuring and site closure costs in 2019 related to the
reorganisation of the Group into global business segments.
-- Foreign exchange gain on rights issue represents a gain made
on a forward contract which was entered into to swap the proceeds
of the Sterling rights issue into Euro in order to pay down part of
the Group's Euro borrowings.
-- In July 2018 the Group entered into swap arrangements to fix
Euro interest rates on the full value of the EUR440 million
committed unsecured revolving credit facility. The fair value of
the unhedged interest derivatives relates to the mark-to-market of
the swap at the respective period ends in excess of the Group's
current borrowings.
4. Segmental analysis
The Group's Executive Committee, chaired by the Chief Executive
Officer, examines the Group's performance.
With the acquisition of Omnova the Group has reassessed how the
business will be managed going forwards. The Group's Acrylates
business, which was previously managed and reported within the
Industrial Specialities division has been identified as a separate
segment by the Group's Executive Committee. A new management
structure has been implemented and management information for
Acrylates is now reported separately to the Committee.
The Group's reportable segments are:
Performance Elastomers
Performance Elastomers is focused on healthcare, paper, carpet
and foam markets through our water-based Nitrile Butadiene Rubber
latex (NBR) and Styrene Butadiene Rubber latex (SBR) products.
Functional Solutions
Functional Solutions is focused on coatings, construction,
adhesives and technical textiles markets through our water-based
acrylic and vinylic based dispersions products.
Industrial Specialities
Industrial Specialities is focused on speciality chemical
additives and non-water-based chemistry for a broad range of
applications from polymer additives to emerging materials and
technologies.
Acrylates
Acrylates is focused on the production of acrylate monomers
which are sold to external customers in European markets as well as
our European Functional Solutions business.
The Group's Executive Committee is the chief operating decision
maker and primarily uses a measure of earnings before interest,
tax, depreciation and amortisation (EBITDA) to assess the
performance of the operating segments. No information is provided
to the Group's Executive Committee at the segment level concerning
interest income, interest expense, income tax or other material
non-cash items.
No single customer accounts for more than 10% of the Group's
revenue.
A segmental analysis of Underlying performance and Special Items
is shown below.
Three months ended March 2020 (unaudited)
Unallocated
Performance Functional Industrial corporate
Elastomers Solutions Specialities Acrylates expenses Total
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- ----------- ---------- ------------- --------- ----------- ------
Revenue
Total revenue 149.7 132.4 41.4 17.4 - 340.9
Inter-segmental revenue - - - (2.5) - (2.5)
-------------------------------- ----------- ---------- ------------- --------- ----------- ------
149.7 132.4 41.4 14.9 - 338.4
-------------------------------- ----------- ---------- ------------- --------- ----------- ------
EBITDA 23.9 20.2 6.0 (1.1) (3.9) 45.1
Depreciation and amortisation (5.6) (4.9) (1.5) (0.7) (0.1) (12.8)
-------------------------------- ----------- ---------- ------------- --------- ----------- ------
Operating profit before Special
Items 18.3 15.3 4.5 (1.8) (4.0) 32.3
Special Items (0.4) (0.8) (0.7) (0.2) 6.0 3.9
-------------------------------- ----------- ---------- ------------- --------- ----------- ------
Operating profit 17.9 14.5 3.8 (2.0) 2.0 36.2
Finance costs (4.4)
-------------------------------- ----------- ---------- ------------- --------- ----------- ------
Profit before taxation 31.8
-------------------------------- ----------- ---------- ------------- --------- ----------- ------
Three months ended March 2019 (unaudited)
-------------------------------------------------------------------------
Unallocated
Performance Functional Industrial corporate
Elastomers Solutions Specialities Acrylates expenses Total
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- ----------- ---------- ------------- ----------- ----------- -------
Revenue
Total revenue 156.7 159.1 42.4 18.8 - 377.0
Inter-segmental revenue - - - (1.9) - (1.9)
-------------------------------- ----------- ---------- ------------- ----------- ----------- -------
156.7 159.1 42.4 16.9 - 375.1
-------------------------------- ----------- ---------- ------------- ----------- ----------- -------
EBITDA 22.4 17.6 5.8 1.1 (3.8) 43.1
Depreciation and amortisation (6.2) (4.0) (1.3) (0.6) (0.2) (12.3)
-------------------------------- ----------- ---------- ------------- ----------- ----------- -------
Operating profit before Special
Items 16.2 13.6 4.5 0.5 (4.0) 30.8
Special Items (1.0) (1.0) (0.7) (0.2) - (2.9)
-------------------------------- ----------- ---------- ------------- ----------- ----------- -------
Operating profit 15.2 12.6 3.8 0.3 (4.0) 27.9
Finance costs (4.3)
-------------------------------- ----------- ---------- ------------- ----------- ----------- -------
Profit before taxation 23.6
-------------------------------- ----------- ---------- ------------- ----------- ----------- -------
Year ended December 2019 (audited)
-------------------------------------------------------------------------
Industrial Unallocated
Performance Functional Specialities Acrylates corporate
Elastomers Solutions (restated) (restated) expenses Total
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- ----------- ---------- ------------- ----------- ----------- -------
Revenue
Total revenue 623.7 612.8 157.9 70.9 - 1,465.3
Inter-segmental revenue - - - (6.2) - (6.2)
-------------------------------- ----------- ---------- ------------- ----------- ----------- -------
623.7 612.8 157.9 64.7 - 1,459.1
-------------------------------- ----------- ---------- ------------- ----------- ----------- -------
EBITDA 96.3 69.9 23.8 1.0 (13.1) 177.9
Depreciation and amortisation (24.8) (17.6) (5.4) (3.4) (0.9) (52.1)
-------------------------------- ----------- ---------- ------------- ----------- ----------- -------
Operating profit before Special
Items 71.5 52.3 18.4 (2.4) (14.0) 125.8
Special Items (0.3) (4.3) (4.1) (0.6) (5.9) (15.2)
-------------------------------- ----------- ---------- ------------- ----------- ----------- -------
Operating profit 71.2 48.0 14.3 (3.0) (19.9) 110.6
Finance costs (10.1)
-------------------------------- ----------- ---------- ------------- ----------- ----------- -------
Profit before taxation 100.5
-------------------------------- ----------- ---------- ------------- ----------- ----------- -------
5. Reconciliation of profit from operations to cash generated
from operations
Three months Three months Year ended
ended 31 ended 31 31 December
March 2020 March 2019 2019
Unaudited Unaudited Audited
GBPm GBPm GBPm
----------------------------------------- ------------ ------------ ------------
Operating profit 36.2 27.9 110.6
Less: share of profit of joint ventures (0.6) (0.3) (0.9)
------------------------------------------ ------------ ------------ ------------
35.6 27.6 109.7
Adjustments for:
Depreciation of property, plant and
equipment 10.6 10.3 43.4
Depreciation of right of use assets 1.8 1.8 7.3
Amortisation of other intangibles 0.4 0.2 1.4
Share-based payments 0.4 0.4 0.6
Special Items (3.9) 2.9 15.2
Cash impact of acquisition costs (2.2) - (7.5)
Cash impact of restructuring and site
closure (0.5) (0.7) (4.4)
Cash impact of foreign exchange gain
on deal contingent 12.7 - -
Cash impact of foreign exchange gain
on rights issue - - 3.5
Pension funding (4.4) (4.1) (17.5)
(Increase) / decrease in inventories (3.6) 3.6 15.0
(Increase) / decrease in trade and
other receivables (22.5) (31.1) 34.3
Increase / (decrease) in trade and
other payables (42.6) (27.8) (30.8)
Cash generated from operations (18.2) (16.9) 170.2
------------------------------------------ ------------ ------------ ------------
6. Tax
Tax on the Underlying profit before taxation for the three month
period was charged at 17.9% (three months ended 31 March 2019:
14.1%; year ended 31 December 2019: 14.0%), representing the best
estimate of the annual effective income tax rate expected for the
full year.
Inclusion of the best estimate for the tax charge on the Special
Items results in a tax rate of 15.1% (three months ended 31 March
2019: 13.2%; year ended 31 December 2019: 14.8%), on the IFRS
profit before taxation. The difference in the effective tax rate on
the Underlying profit before tax and the IFRS profit before tax
reflects the tax associated with the Special Items, some of which
are not taxable or subject to tax deductions.
7. Earnings per share
Three months ended Three months ended
31 March 2020 31 March 2019
------------------------------ ------------------------------
Underlying Special Underlying Special
performance Items IFRS performance Items Total
Earnings
Profit/(loss) attributable
to equity holders of the
parent GBPm 24.7 2.0 26.7 24.4 (4.5) 19.9
Number of shares(1)
Weighted average number
of ordinary shares - basic '000 424,849 363,997
Effect of dilutive potential
ordinary shares '000 1,937 2,198
Weighted average number
of ordinary shares - diluted '000 426,786 366,195
Earnings/(loss) per share(1)
Basic earnings/(loss) per
share pence 5.8 0.5 6.3 6.7 (1.2) 5.5
Diluted earnings/(loss)
per share pence 5.8 0.5 6.3 6.6 (1.2) 5.4
1 - The weighted average number of ordinary shares for the three
months to 31 March 2019 used in the calculation of earnings per
share, has been adjusted by multiplying by an adjustment factor of
1.0713 to reflect the bonus element in the shares issued under the
terms of the rights issue which completed on 29 July 2019.
Year ended 31 December
2019
------------------------------
Underlying Special
performance Items Total
Earnings
Profit/(loss) attributable
to equity holders of the
parent GBPm 99.5 (14.9) 84.6
Number of shares
Weighted average number
of ordinary shares - basic '000 393,349
Effect of dilutive potential
ordinary shares '000 2,109
Weighted average number
of ordinary shares - diluted '000 395,458
Earnings/(loss) per share
Basic earnings/(loss) per
share pence 25.3 (3.8) 21.5
Diluted earnings/(loss)
per share pence 25.2 (3.8) 21.4
8. Financial instruments
The risks associated with the Group's financial instruments and
related polices are detailed in the 2019 Annual Report in note 22
to the financial statements. There have been no changes in the
risks and the management thereof since 31 December 2019.
F air values have been obtained from the relevant institutions
where appropriate. Where market values are not available, fair
values of financial assets and financial liabilities have been
calculated by discounting expected future cash flow at prevailing
interest rates and by applying period end exchange rates. The
carrying amount of borrowings approximates to book value.
The fair value of the Group's financial instruments are measured
using inputs other than quoted prices that are directly or
indirectly observable (Level 2 as defined in IFRS 13).
There are no significant differences between the carrying value
and fair value of either financial assets or financial
liabilities.
9. Defined benefit schemes
The value of the defined benefit plan assets has been updated to
reflect their market value as at 31 March 2020. Actuarial gains or
losses are recognised in the Consolidated Statement of
Comprehensive Income in accordance with the Group's accounting
policy. The liabilities have been updated to reflect the change in
the discount rate and other assumptions.
10. Analysis of net debt
31 March 31 March 31 December
2020 2019 2019
GBPm GBPm GBPm
-------------------------- -------- -------- -----------
Bank overdrafts (25.2) (38.1) -
Current borrowings (373.8) (47.3) -
-------------------------- -------- -------- -----------
Current liabilities (399.0) (85.4) -
Non-current borrowings (103.2) (230.5) (82.9)
-------------------------- -------- -------- -----------
Non-current liabilities (103.2) (230.5) (82.9)
Total borrowings (502.2) (315.9) (82.9)
-------------------------- -------- -------- -----------
Cash and cash equivalents 475.1 74.7 103.6
Net debt (27.1) (241.2) 20.7
-------------------------- -------- -------- -----------
Net debt is defined in the glossary of terms in note 17.
Capitalised debt costs, which have been recognised as a reduction
in borrowings in the financial statements, amounted to GBP3.4
million at 31 March 2020 (31 March 2019: GBP1.9m, 31 December 2019:
GBP1.7 million).
On 31 March 2020 the Group drew down EUR420.7m of its EUR520.0m
unsecured bridge facility in order to settle its deal contingent
currency derivative in preparation for the completion of the
acquisition of Omnova Solutions Inc on 1 April 2020.
Three months Three months
ended ended Year ended
31 March 31 March 31 December
2020 2019 2019
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
-------------------------------------------- ------------ ------------ ------------
Net cash (outflow)/inflow from operating
activities (24.3) (21.6) 151.9
Add: dividends received from joint ventures 0.2 0.5 1.6
Less: net capital expenditure (13.9) (14.4) (68.8)
(38.0) (35.5) 84.7
Dividends paid - - (47.9)
Dividends paid to non-controlling interests - - (0.6)
Proceeds on issue of shares - - 199.1
Settlement of equity-settled share-based
payments - - (2.5)
Repayment of principal portion of lease
liabilities (1.7) (1.7) (6.8)
Foreign exchange and other movements (8.1) 10.0 8.7
-------------------------------------------- ------------ ------------ ------------
(Increase)/decrease in net debt (47.8) (27.2) 234.7
-------------------------------------------- ------------ ------------ ------------
Net debt at 1 January 20.7 (214.0) (214.0)
-------------------------------------------- ------------ ------------ ------------
Net debt at period end (27.1) (241.2) 20.7
-------------------------------------------- ------------ ------------ ------------
11. Capital commitments
The capital expenditure authorised but not provided for in the
interim financial statements as at 31 March 2020 was GBP11.6m (31
March 2019: GBP14.4m, 31 December 2019: GBP11.7m).
12. Contingent liabilities
During 2018, the European Commission (the 'Commission')
initiated an investigation into practices relating to the purchase
of Styrene monomer by companies, including Synthomer, operating in
the European Economic Area. The Company has and will continue to
fully cooperate with the Commission during its investigation. As
the investigation is ongoing and the Commission does not provide
feedback on its work until the investigation is complete, it is not
possible to determine whether or not a liability exists in relation
to this matter.
13. Related party transactions
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not
included in this note. Other than the relationship with the UK
defined benefit pension scheme as disclosed in note 26 of the 2019
Annual Report, there were no other related party transactions
requiring disclosure.
Following the rights issue which completed on 29 July 2019,
Kuala Lumpur Kepong Berhad Group holds 20.98% of the Company's
shares and is considered to be a related party from this date.
14. Post balance sheet events
On 1 April 2020, the Group completed its acquisition of Omnova
Solutions Inc at a price of $10.15 per share, representing an
enterprise value of $824 million (GBP654 million). The acquisition
strengthens Synthomer's presence in North America and increases its
presence in Europe and Asia. The asset identification and fair
value allocation processes are currently under review. At the date
of this report it is impracticable to disclose the provisional fair
values of the acquired assets, liabilities, contingent liabilities
and goodwill.
It is unclear what impact the unprecedented COVID-19 pandemic
will have on the Group's financial performance for the year.
Speciality chemicals are designated as key industrial assets in the
geographies in which Synthomer operates and throughout the peak of
the pandemic in Asia and Europe, the Group continued to operate 37
of its 38 global manufacturing sites. April and May volumes for the
enlarged business were impacted across the Group and whilst demand
for Nitrile latex, non-wovens and adhesives remained strong, sales
into industrial markets including automotive, coatings, graphic
paper, carpet and the oil & gas sector were impacted by
COVID-19. Volumes were lower than a strong comparative period by
approximately 20% although volumes did strengthen towards the end
of May.
Synthomer has a strong financial position, but a number of steps
have been taken to mitigate the impact of COVID-19 and to preserve
liquidity, cashflow and financial position. These include reducing
capital expenditure for 2020 to approximately GBP50.0m from the
GBP73.5m originally anticipated (including OMNOVA) and suspension
of the final dividend for 2019. The Group's Board, Executive and
Senior Management have also frozen their salaries at 2019 levels
and delayed any further review until October 2020.
15. Seasonality
Historically, the Group has seen no visible fixed pattern to
seasonality in Q1 trading compared to rest of the year but we do
note seasonality in our working capital with an expected outflow in
Q1 compared to the December position. However, in 2020 it is
unclear what impact the COVID-19 pandemic will have on the Group's
financial performance for the full year.
16. Risks and uncertainties
The Group faces a number of risks which, if they arise, could
affect its ability to achieve its strategic objectives. As with any
business, risk assessment and the implementation of mitigating
actions and controls are vital to successfully achieving the
Group's strategy. The Directors are responsible for determining the
nature of these risks and ensuring appropriate mitigating actions
are in place to manage them.
These principal risks are categorised into the following
types:
-- Strategic
-- Operational
-- Compliance
-- Financial
With the exception of the impact of COVID-19, referred to in
notes 14 and 15, the Directors consider that the principal risks
and uncertainties which could have a material impact on the Group's
performance in the remaining part of the financial year remain the
same as those stated on pages 32 to 36 of 2019 Annual Report which
is available on our website
www.synthomer.com/investor-relations.
17. Glossary of terms
EBITDA EBITDA is calculated as operating profit from continuing
operations before depreciation, amortisation and
Special Items.
Operating profit Operating profit represents profit from continuing
activities before finance costs and taxation.
----------------------------------------------------------------------
Special Items Special Items are either irregular, and therefore
including them in the assessment of a segment's
performance would lead to a distortion of trends,
or are technical adjustments which ensure the Group's
financial statements are in compliance with IFRS
but do not reflect the operating performance in
the year, or both. An example of the latter is
the amortisation of acquired intangibles, which
principally relates to acquired customer relationships.
The Group incurs costs, which are recognised as
an expense in the income statement, in maintaining
these customer relationships. The Group considers
that the exclusion of the amortisation charge on
acquired intangibles from Underlying performance
avoids the potential double counting of such costs
and therefore excludes it as a Special Item from
Underlying performance.
The following are consistently disclosed separately
as Special Items in order to provide a clearer
indication of the Group's underlying performance:
* Restructuring and site closure costs;
* Sale of a business or significant asset;
* Acquisition costs;
* Amortisation of acquired intangible assets;
* Impairment of non-current assets;
* Fair value adjustments in respect of derivative
financial instruments where hedge accounting is not
applied;
* Items of income and expense that are considered
material, either by their size and/or nature;
* Tax impact of above items; and
* Settlement of prior period tax issues.
----------------------------------------------------------------------
Underlying performance Underlying performance represents the statutory
performance of the Group under IFRS, excluding
Special Items.
----------------------------------------------------------------------
Net debt Cash and cash equivalents together with short-
and long-term borrowings.
----------------------------------------------------------------------
Leverage Net debt divided by EBITDA.
The Group's financial covenants are calculated
using the accounting standards adopted by the Group
at 31 December 2018 and accordingly, net debt and
EBITDA exclude the impact of IFRS 16.
----------------------------------------------------------------------
Ktes Kilotonnes or 1,000 tonnes (metric).
----------------------------------------------------------------------
Responsibility statement
The Directors confirm that these interim financial statements
have been prepared in accordance with International Accounting
Standard 34, Interim Financial Reporting, as adopted by the
European Union.
The Directors of Synthomer plc are listed in the 2019 Annual
Report and there have been no subsequent changes.
The Directors are responsible for the maintenance and integrity
of, amongst other things, the financial and corporate governance
information as provided on the Synthomer website. Legislation in
the United Kingdom governing the preparation and dissemination of
financial information may differ from legislation in other
jurisdictions.
On behalf of the Board of Directors
C G MacLean S G Bennett
Chief Executive Officer Chief Financial Officer
15 June 2020
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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